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Press Release: 18 March 2009

Currency Confusion Reigns

UK Holidaymakers In A Fog About The Eurozone

In a year when the wrong holiday decision could cost UK tourists money they can ill afford, a new poll for Post Office® Travel Services has revealed that consumers are caught in a fog of eurozone confusion.

Among the many surprising currency misconceptions uncovered by the research are beliefs that Turkey and the Czech Republic have joined the eurozone, while Portugal and Greece remain outside.

The OnePoll survey of 2,000 consumers¹ for the Post Office sounds a warning bell that significant numbers of UK holidaymakers - concerned about the weakness of the pound and high prices in the eurozone - may avoid Europe’s cheaper destinations, mistakenly thinking that they use the euro.

Equally, many could be in for a surprise if they choose to holiday in eurozone countries because they mistakenly believe these are outside the zone and are therefore cheaper.

With the euro still riding high against a weak pound, at least 20 per cent of consumers surveyed did not know that key destinations like Portugal and Greece use the currency.² Even more – 43 per cent – did not know that Austria, a eurozone founder, is a member.

More worryingly, many people incorrectly thought that destinations which rate consistently as among the cheapest worldwide in the Post Office Holiday Costs Barometer of living costs abroad are eurozone members.

Almost one-third (33 per cent) said that Turkey, which uses the lira, is in the eurozone. Over a quarter said that the Czech Republic (koruna) and Hungary (forint) are zone members. Almost one half (46 per cent) said that Denmark (krone) uses the euro.

There was poor awareness too about countries that have signed up to the euro more recently. 60 per cent were unaware that Cyprus and Malta joined the eurozone in January 2008, while only 25 per cent knew that Slovakia, rated as one of Europe’s cheapest and most up-and-coming destinations, became a member in January.

According to the Post Office research, currency confusion also extends to non-euro destinations, giving rise to concerns that a significant minority of people will choose their summer holiday without considering the exchange rate or cost of living.

When asked to match particular destinations with their currency, only 31 per cent of consumers were able to link Bulgaria with the lev³, even though many more UK tourists have visited in recent years and it is being tipped as one of the best cheap alternatives to a eurozone resort this summer.

And, surprisingly, only 45 per cent could match Poland – a destination with flights now widely available from a range of UK airports - with its currency, the zloty4.

Andrew Spice of Post Office Travel Services said: “Confusion about the most commonly used currencies in Europe is a worrying indication that UK holidaymakers may choose a holiday destination that will cost them more money at just the time when every penny counts. People may be well aware that sterling has slumped against the euro but they also need to know which countries do and don’t use the currency so that they can make an informed decision about where to holiday.

“Our survey reveals that a significant minority of people think some of Europe’s cheapest destinations are eurozone members. However, the exchange rate is more stable and the cost of living much lower in places like Turkey, Hungary and Poland and this will save cash-strapped holidaymakers money.”

Comparing exchange rates this year with 12 months ago, the Post Office, the UK’s largest provider of foreign currency, said that UK tourists will get almost 10 per cent more Polish zloty for their pounds than a year ago. They will also get around the same number of Turkish lira and only slightly less Hungarian forint. And, while sterling is currently just under 10 per cent weaker than a year ago against the Czech koruna, this compares favourably with the drop of almost 17 per cent in the value of the pound against the euro.

Over 1,600 Post Office bureau de change branches offer all the most widely requested European currencies on demand, including the Turkish lira, Polish zloty, Czech koruna and Hungarian forint. These can also be pre-ordered for collection or home delivery at all 11,500 Post Office outlets and online at postoffice.co.uk.

Ends

Notes to Editors:

¹ Survey of 2,000 UK holidaymakers for Post Office Travel Services by OnePoll to establish awareness of currencies used in tourist destinations.

² Post Office Currency Confusion: Table showing the percentage of UK holidaymakers who think these European countries use the euro:

³ When asked to identify which country uses the lev from a choice of Hungary, Croatia, Lithuania, Poland and Bulgaria, only 30 per cent chose Bulgaria. Almost as many (30 per cent) selected Lithuania, while 14 per cent opted for Hungary.

4 When asked which country uses the zloty from a choice of Lithuania, Poland, Lebanon, Bulgaria and Russia, 45 per cent identified Poland. 20 per cent picked Lebanon while around 11 per cent each choice the remaining three countries.